Mumbai, Jan. 16
INDUSIND Bank recorded a 36-per cent drop in net profit at Rs 27.37 crore for the quarter ended December 31, 2005, against Rs 42.85 crore for the corresponding period last year.
The fall in profit was due to lower net interest income, operating profit and profit on sale of investments. The bank has also made provision of Rs 12.38 crore against standard assets as per RBI norms.
For the third quarter 2005-06, IndusInd Bank's total income increased to Rs 352.18 crore (Rs 317.6 crore). Net interest income fell to Rs 73.92 crore (Rs 101.18 crore). Other income increased to Rs 55.98 (Rs 46.69 crore).
Total expenditure increased to Rs 307.68 crore (Rs 230.54 crore).
Operating profit fell to Rs 44.5 crore (Rs 87.06 crore).
Capital adequacy ratio was at 11.79 per cent (12.73 per cent). Net NPAs as proportion to total assets fell to 2.45 per cent (2.71 per cent).
Mr Bhaskar Ghose, Managing Director, IndusInd Bank said, "The rising interest rate scenario pushed up the cost of our deposits. But now we are moving away from wholesale business to retail business."
The fall in operating profit was due to the aggressive expansion of the branch network.
About the fall in earnings from sale of investments, Mr Ghose said the bank was consciously moving towards more revenue from core banking functions.
Advances increased 25 per cent to Rs 9,196 crore (Rs 7,374 crore). Deposits, too, rose 25 per cent to Rs 13,780 crore (Rs 11,023 crore).
"We want to increase the proportion of our low cost deposits (current account, savings account), which is currently around 12 per cent of total deposits. This will happen when we expand our network," Mr Ghose said.
The bank is shifting the focus of corporate lending from top companies to SMEs, which are high yielding.